Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

E-1 sales under sec 6(2) of cst

Anoop Shrivastava (Free Lancer) (476 Points)

28 May 2013

Hi All,

I wanted to know about Sales made u/s 6(2) of CST Act, in M.P. i.e E-1 Sales..

Please also tell who issues Form 49, to whom Tax invoice is issued, when a Purchaser of E-1 Sales issues invoice to a person whom goods had been sent under this Sales does he charge CST in that invoice.

Reply
Follow
Share

4 Replies

MANOJ MODI (T&A) (40 Points)
Replied 06 June 2013

please help me i have an export order, so i made a purchase against form H but i got form C instead of form H. i paid tax @ 2%. is it legal to do so? Please reply me as soon as possible. can i show sale against form C instead of form H?

Upgrade to CAclubindia Pro. Subscribe Now!

jafer (studies) (194 Points)
Replied 07 June 2013

Dear Manoj,

Please clarify the following,

1) r u the direct exporter ?

2) U have purchased the goods from a vendor by issuing form C not form H ? and the agreement with the vendor was with form H

3) U have paid the 2% to ur vendor also ?

regards,

Jafer

B.N.Dharmendra (Senior Manager Indirect Taxation) (136 Points)
Replied 07 June 2013

The Company(X) who purchases from a Mfr.(Y) against E1 Sales and sends the goods to a company(Z)ie.(Z) placed the Purchase Order on (X), since X as trader purchase from (Y) and instruct him to send the goods to (Z) by endorsing the LR(Lorry Receipt)in favour of(Z).

Step1: Y will raise a Invoice Charging CST-2%(goods can be exmepted also in that State) & issue Form-E1 to X and Collect Form-C from X but material will be sent to Z in another State.

Step2: X(Seller) will raise a Invoice with no Tax on Z(Buyer) and surrender the Endorsed LR to (Z) to take delivery and collect Form-C.

The condition for E1 Sales is All the 3 parties involved should be Registered Dealers, The Goods should be registered in their CST Certificate,The goods movement should be Interstate, LR should be endorsed and the first sale can be CST-2% or CST-Exempted.

B.N.Dharmendra (Senior Manager Indirect Taxation) (136 Points)
Replied 07 June 2013

First the product u have purchased must be listed in your CST Registration Certificate.
You have a Export order and purchased the required goods from a vendor against Form-H.

Have you exported the same product directly to your foreign Buyer?

If you have exported,

u have said collected Form-C instead of Form-H form I assume its from ST Department.
Why u have wasted ur money of 2% it’s a loss for u,
Since u have already issued Form-C and paid CST-2%,

There is nothing wrong in (exporting/selling locally/Interstate or used by u for Mfr.) the purchased goods. Since The Purchase Invoice will not have the Tax Amount so you raise a Cr.Note or request Dr. Note from Vendor for the Tax amount and attach the same with the Purchase Invoice and you declare this as CST Purchase. You can show the Sale as Export Sale.

The Form-H in CST Act is meant for benefit to Exporter to promote Exports and get more Foreign Exchange in to India.

I have given the explanation assuming that you have purchased the goods from the Vendor and exported.
So u have collected the From C instead of Form-H from Your ST department and and issued to the Vendor.
Since its exported so you can show ur sale as Exports in your ST Return